As a manager in our private equity practice, I frequently engage with clients who are going through an exciting growth transformation. New roles are being created and large numbers of reps need to be hired to meet the new ownership’s aggressive growth goals.
However, rapid shifts in roles and headcount increases create a slew of issues for sales and compensation leadership to consider:
We create sales incentive plans so reps drive as fast as possible to generate results—we want them driving for sales at 100 mph at all times. However, when we introduce caps and decelerators, we are effectively getting in a police car and putting up the flashing red and blue lights behind them. Instead of being fully rewarded, the sales reps feel like they have been pulled off the highway and issued a ticket with real out-of-pocket costs to them. As a result, we run the risk of frustrating and demotivating our top performers who are “driving the fastest.”